SEOUL, South Korea - Samsung Electronics Co. said Monday that its net profit rose 16 percent in the third quarter on strong sales of its mainstay memory chips.

Employees are reflected on a wall with the logo of Samsung Electronics in Seoul. [AFP]

Samsung, the world's largest memory chip manufacturer, earned 2.19 trillion won (US$2.3 billion) in the three months ended September 30, the company said in a statement. Samsung posted net profit of 1.88 trillion won a year earlier.

Sales during the quarter rose 4.7 percent to 15.22 trillion won (US$15.9 billion).

The result, better than expected, was Samsung's third profit gain in the past four quarters.

The average estimate of nine analysts surveyed by Dow Jones Newswires forecast that the company would post a net profit of 1.9 trillion won (US$2 billion) on sales of 15.32 trillion won (US$16 billion).

Samsung said profit margins were boosted by its memory chip business as it took advantage of a global surge in prices of dynamic random access memory, or DRAM chips, to shift production from slower growth products.

Sales in its semiconductor business rose seven percent from the same period the year before, with memory chips rising five percent.

Samsung manufactures both DRAM chips, used in personal computers, as well as NAND flash memory chips used in digital cameras and music players like Apple Computer Inc.'s iPod Nano.

"We anticipate our key business units to experience significant tailwinds in the fourth quarter, a seasonally strong period," Chu Woo-sik, senior vice president and head of Samsung's investor-relations team, said in the statement.

"Furthermore, our plan to invest an additional 1 trillion won to increase capacity of our memory-chip business is expected to create revenue opportunities next year," he said.

Shares in Samsung, which released earnings about 50 minutes after the stock market opened, rose 1.6 percent to 654,000 won (US$682) at mid-morning in Seoul, paring earlier gains.